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Welcome to edition 558 of Insider Weekends. An impressive rally on Friday helped the S&P 500 avoid a second week of losses and the index managed to claw back losses from earlier in the week to end with a gain of almost 1%. The Nasdaq was not quite as fortunate and ended up losing 2% for the week despite a small comeback on Friday. The rotation from growth to value continues unabated with the divergence between the S&P 500 Value ETF (SPYV) and the S&P 500 Growth ETF (SPYG) exceeding more than 10% over the last month as you can see from the chart below.
Insiders used the volatility to start buying and insider buying increased significantly last week with insiders purchasing $231.56 million of stock purchased compared to $32.72 million in the week prior. A large portion of this was a $90 million purchase by a Director and 10% owner of medical devices company Alphatec Holdings (ATEC). Selling on the other hand decreased a little with insiders selling $4.65 billion of stock last week compared to $4.82 billion in the week prior. This is still well above what we normally see with insider selling.
Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week dropped to 20.09. In other words, insiders sold more than 20 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at an unusually high 147.22.
Note: As mentioned in the first post in this series, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.
Notable Insider Buys:
1. Enterprise Products Partners L.P. (EPD): $23.16
Director Randa Duncan Williams acquired 677,860 shares of this oil & gas midstream company, paying $22.71 per share for a total amount of $15.39 million. These shares were purchased indirectly by various trusts.